Texas to get $1.4M of Toyota payment

Updated 7:00 pm, Thursday, February 14, 2013

Texas will receive $1.4 million of a $29 million settlement reached between it and 27 other states and Toyota Motor Corp. over sudden acceleration problems in certain Toyota and Lexus models.

Announced Thursday by Texas Attorney General Greg Abbott, the agreement with the Japanese automaker and its North American subsidiaries closes a multistate investigation into whether Toyota concealed safety issues related to the unintended acceleration. In their lawsuit, state attorneys general accused Toyota of failing to notify customers promptly about the problems.

Their investigation partly blamed poor communication between Toyota in Japan and its U.S. units, prompting the company to promise it will improve communications and give its U.S. executives more decision-making power.

“Resolving this inquiry is another step we are taking to turn the page on legacy issues from Toyota's past recalls in a way that benefits our customers,” said Christopher Reynolds, group vice president and general counsel for Toyota Motor Sales U.S.A. , in a statement.

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Toyota agreed to pay $1.14 million in civil penalties and $217,000 in attorneys' fees to the state of Texas, according to a news release. Also, the settlement requires the company to set aside at least $5 million for a restitution fund to reimburse customers for out out-of-pocket expenses, such as rental cars and taxi fees, that stemmed from Toyota's recalls in 2009 and 2010, according to the news release.

Toyota Motor Corp. has blamed sticky gas pedals, faulty floor mats and driver error for the unintended acceleration. The National Highway Traffic Safety Administration and NASA have both investigated and agreed with Toyota that electronics weren't causing the problem.

Toyota has paid more than $1 billion to settle claims related to the recalls, including a record $17.4 million fine to the U.S. government for failing to quickly report safety problems.

The agreement announced Thursday requires Toyota to provide more vehicle information online and expand its rapid-response teams, which respond within 24 hours to safety issues that are reported by customers. The teams draw from a group of 200 technical experts located across Toyotas' North American operations.

The settlement also prohibits Toyota from reselling any of the recalled vehicles it acquired unless it provides notice of their potential defects.

The company cannot designate any used vehicle acquired under the recall as “Toyota certified” or misrepresent the purpose of a dealer inspection or repair when directing owners to bring their vehicles to the dealer.